Australian retailers are adjusting their policies on free returns and delivery incentives as shipping costs continue to rise. The State of Shipping 2025 report by Shippit reveals insights from retailers, customers, and carriers, showcasing the challenges businesses face in meeting consumer expectations against economic realities.
Retailers in Australia are navigating changing industry dynamics by reevaluating their shipping strategies amidst escalating delivery expenses and global trade shifts. The landscape post-COVID has normalized fast and free delivery, but factors like supply chain disruptions, tariff pressures, and evolving consumer demands are prompting a reassessment. The focus is now on economic sustainability over mere desirability, with some retailers scaling back on returns and delivery perks while others revamp their networks entirely.
Delivery costs are on an upward trend for standard and express services, with a notable decrease in same-day delivery pricing. The demand for speed and flexibility is soaring, prompting retailers to explore solutions like Uber Direct’s on-demand network to meet customer expectations without significant infrastructure investments. Same-day delivery is evolving from a premium service to a practical choice, driving faster fulfilment across various product categories.
The financial strain on retailers is reshaping returns policies, with the prevalence of free returns diminishing significantly. While easy return options remain crucial for customer loyalty, many retailers are finding it challenging to sustain these features due to rising costs. Some are leveraging local fulfilment initiatives, converting physical stores into fulfilment centers to facilitate quicker and localized delivery.
Consumer demand for sustainability is influencing purchasing decisions, but only a fraction of Australian retailers promote green delivery options online. While efforts towards eco-conscious shipping and returns are increasing, hurdles like infrastructure costs and consumer willingness to pay premiums for sustainable choices persist. International expansion remains a priority for Australian and New Zealand brands despite challenges like new tariffs and higher cross-border delivery expenses.
Carriers are under pressure to optimize last-mile delivery amid escalating costs, urban congestion, and heightened service expectations. Investments in technology like real-time tracking and AI-powered route planning are underway to enhance speed and efficiency. Artificial intelligence and emerging technologies are key focus areas for retailers in 2025, aiming to improve delivery reliability, speed, and operational efficiency.
As the retail landscape continues to evolve, retailers are embracing technology and strategic initiatives to navigate the complex terrain of shipping costs, returns policies, and sustainability demands. The delicate balance between meeting consumer expectations and managing operational expenses will be crucial for retailers seeking long-term growth and customer loyalty in the ever-changing eCommerce landscape.
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